Bhubaneswar, Feb. 22: The Opposition today stalled the Assembly proceedings and forced a series of adjournments over the government’s decision to hike the value added tax (VAT) on medicines and other essential commodities.
Last evening, the state cabinet had decided to effect 1 per cent hike in VAT from the existing 4 per cent rate to 5 per cent on various items, including medicines, food materials, iron products, IT components and industrial items. Besides, 4 per cent VAT will be imposed on sugar and textile products. A notification to the effect, which involves an amendment to the necessary act, will be brought in the Assembly during the current session.
Taking exception to the decision as it had been taken during the Assembly session, the Opposition demanded an immediate discussion on the issue. “It’s a gift to the traders by the BJD, which had collected huge funds from them for the panchayat polls,” said leader of Opposition Bhupinder Singh.
Yesterday, governor M.C Bhandare, in his customary budget address, had stated that the state had a sound financial condition and it did not need any external funding or loan. “Strangely, a few hours later, the state cabinet decided to revise the VAT ostensibly to mop up external resources,” Singh said.
While it is taxing common people, Singh pointed out that the state government had yesterday decided to waive electricity duty for the captive power generation companies.
He accused the government of contempt of the state legislature as it was not taken into confidence before the decision was taken.
The state government, however, maintained that it was “prepared to face discussion on any issue raised by the Opposition”. “But, the Opposition members should not stall the proceedings. Frustrated after their rout in the panchayat polls, the Congress members are trying to make it an issue,” said parliamentary affairs minister Raghunath Mohanty.
A meeting, called by Speaker Pradip Amat to resolve the issue, did not yield any result.
The druggists and cloth merchants expressed their reservation against the VAT revision.
“The state government should not impose any more tax on medicines since these are essential items,” said general secretary of the Utkal Chemists and Druggists Association Chowdhury Prabir Kumar Das, pointing out that 4 per cent VAT was being levied throughout the country.
He said the state would get only Rs 16 crore if additional 1 per cent VAT was levied on medicine.
“It’s an injustice. No VAT is levied on essential commodities such as sugar at the national level,” said joint secretary of the Cuttack Chamber of Commerce Srikant Sahu.
“We don’t have any objection if 5 per cent VAT is levied on textile fabrics at the national level. But, if it is done only in Odisha, it will be unfortunate,” said president of the Cuttack Textile Association.
Last year, the textile and sugar merchants in the state had protested against imposition of 4 per cent VAT on sugar and textile fabrics. They called off their agitation after the state government waived VAT from these two items.
